There are countless factors that buyers consider when looking at properties, but one of the most important is the quality of the school district. Whether or not you have children of your own, the local schools can have a direct impact on the value of your home and your overall experience as a community member. Understanding the connection between school ratings and property values will help you make informed decisions during your home search.
The Relationship Between Schools and Home Values
It should be no surprise that home values are correlated with the quality of the local school district. The data shows that houses near highly rated schools cost more, sell faster, and have better resale value.
Here are five interesting statistics that show the relationship between schools and home values:
Homes Near Highly Rated Schools Cost More
According to research from Realtor.com, properties near schools with a GreatSchools rating of 9 or 10 cost over 78% more than properties in the surrounding counties. Families seek out homes in highly rated school districts, so the competition among buyers drives up home values.
More School Spending Increases Home Values
A study from the National Bureau of Economic Research found a direct correlation between school spending and property values. An increase in school spending of just $1 per student increases home values by $20. This shows that potential buyers see the value of well-funded schools and are willing to pay more to live in districts that invest in their students.
Higher Test Scores Raise Property Values
Test scores are one of the most popular ways to measure the success of a school district, and higher test scores generally mean higher property values. A study reported in the New York Times found that, in suburban communities, a 5% increase in test scores can raise home prices by 2.5.%.
Homes in Good School Districts Sell Faster
Not only do homes in great school districts sell for higher values, but they also sell faster. Researchers from Realtor.com reported that homes near highly ranked schools sold eight days faster on average than homes in below-average school districts.
Homes in Walking Distance Are Worth More
All houses in a good school district are positively impacted by the school’s presence, but homes in walking distance benefit even further. One study of home values in Oshkosh, Wisconsin found that proximity to schools was positively correlated with property values. Another study in Greenville, South Carolina also found that home values increase with proximity to schools.
The Appeal of a Good School District
Families with school-aged children seek out houses near strong schools. Here are just a few reasons why homes in good school districts are so appealing:
Strong Academics
Parents want their children to attend schools that offer quality academics, low student-to-teacher ratios, and advanced classes. Your education can have a huge impact on your life, and families seek out good school districts so their kids have the best chances of success.
Extracurriculars
Academic support isn’t the only reason families want to live in good school districts. Highly rated, well-funded schools usually offer great extracurriculars, too. Parents of student athletes will look for school districts with successful sports teams. Quality school districts usually offer good art and music programs for creatively talented students, too.
Access to Resources
Families can also access a number of other amenities when they live in highly rated school districts. For example, a well-funded school might have a state-of-the-art auditorium that’s used for community events. The local schools may have great playgrounds, a track, or even tennis courts that families can use.
Other Community Benefits
The school itself can offer a lot of value to families, but there are other community benefits to living in a good school district as well. Cities with highly rated schools typically have other well-funded amenities. Here are some of the other perks you might experience:
Public Parks
Well-maintained public parks are great for individuals and families alike. Communities that invest in their schools often invest in their local parks, too.
Library
Public libraries are excellent resources for all community members. Many offer classes, clubs, and resources that people of all ages can benefit from. If your town has strong schools, it probably has a robust library system as well.
Family Events
Good school districts attract families, so towns with good schools often put on family events like free concerts, movie nights, or festivals. Even if you don’t have children, local events can be an enjoyable way to connect with your community.
How to Evaluate a School’s Quality
Because the quality of the school district can have such a dramatic impact on a home’s value, it’s important to research the local schools before making an offer on a property. Even if you don’t plan to have kids, purchasing a house in a good school district can pay off.
Organizations like the Office of Elementary and Secondary Education and the National Center for Education Statistics collect and report data on schools. Sites like GreatSchools offer ratings and rankings of schools based on these statistics.
The following are some of the most important criteria that can impact a school’s rating:
- Standardized test scores
- Student-teacher ratios
- Attendance rates
- Graduation rates
- Rates of students taking AP or IB classes
- College enrollment rates
- Extracurricular activities
- Cost per student
Is Buying a House in a Good School District Worth It?
Houses in good school districts come with a premium. If you don’t have children, you might wonder whether it’s worth it to pay extra for a property near a good school.
Although you might not benefit directly from the school system, purchasing a home in a good district can provide a great return on investment. Highly rated schools tend to maintain their rankings, so you can expect your property to continue to rise in value. If you plan to sell the house in five to 10 years, buying in a good school district is a financially sound choice.
However, you might not want to live in close proximity to a school if you don’t have children. Schools can attract a lot of noise and traffic during drop-off and pick-up. If you prefer a more peaceful neighborhood, look for houses that are within the school district but aren’t particularly close to any schools.
Whether you’re a seller or a buyer, you should keep the school system in mind as you navigate the real estate market. Sellers of houses in great school districts can set a higher listing price and could even expect a bidding war. Buyers should consider looking for homes near good schools because of the numerous community benefits and the resale potential. If you’re not sure how the quality of the schools in your area will affect your home search, consult with a local real estate agent who’s familiar with your market.